TWN Info Service on WTO and Trade Issues (May22/14)
18 May 2022
Third World Network

WTO DG, TRIPS Chair "manage" TRIPS Covid-19 negotiation process
Published in SUNS #9578 dated 18 May 2022

Geneva, 17 May (D. Ravi Kanth) -  The Chair of the World Trade Organization's TRIPS Council and the WTO Director-General on 16 May apparently issued calls to find consensus on the controversial draft TRIPS COVID-19 document without undue delay, with the DG saying that members must prove to the commentators that MC12 is not going to be a failure, said people who asked not to be quoted.

[The draft TRIPS COVID-19 text was presented by the DG on her own responsibility on 3 May through the Chair of the TRIPS Council in document IP/C/W/688.]

In what appears to be early signs of panic, the Director-General Ms Ngozi Okonjo-Iweala exhorted members at two different meetings - an LDC retreat and the informal TRIPS Council meeting - that took place simultaneously on 16 May in two different venues.

While the informal TRIPS Council meeting was held at the WTO, the LDC retreat took place at the InterContinental Hotel in Geneva.

The DG, who was present at both the meetings, exhorted members to prove the commentators wrong by concluding major decisions at the upcoming 12th ministerial conference (MC12), said people familiar with the discussions at the two meetings.

Citing an op-ed piece that appeared in the Washington DC-based The Hill publication, written by Marc L. Busch, an academic of Georgetown University, that suggested that MC12 is going to be a failure, the DG apparently said when you read these things, you're dubbed as a failure before you even try.

She went on to say, "I hope it makes an impression on people because living in this Geneva bubble and not listening to what's happening outside it's lovely to ask questions and to throw obstacles."

"I think everybody is entitled to ask every question, it is their right, but at the end of the day there must be a push towards results," she said, according to a Geneva-based trade official, who preferred not to be identified.

An apparently agitated DG is understood to have said that "the world (is) looking on us to produce results, not to block everything at every stage in every negotiation, whether it's fisheries or [WTO] response to the pandemic or agriculture," the official said.

With less than four weeks left for MC12, which is scheduled for 12-15 June, the DG urged members to put their objections to the controversial TRIPS COVID-19 text.

She apparently said at the end of the day, it will not be good to block the process and "for each side to use the other one as an excuse not to make progress."

Ms Okonjo-Iweala also made the same comments at the LDC retreat, apparently telling the LDCs not to overly focus on their proposal for continuing with the preferences for the graduating LDCs, while insisting that they must look at the big picture of crucial outcomes on fisheries subsidies, the WTO response to the pandemic, and other issues, said a participant, who asked not to be quoted.

The DG's remarks at the informal TRIPS Council meeting came after many questions were raised by Switzerland and the United Kingdom as well as several developing countries about the legal status of the proposed text and several issues that were omitted from the text, particularly on access to diagnostics and therapeutics.

TRIPS COUNCIL CHAIR

At the informal TRIPS Council meeting on 16 May, the Chair, Ambassador Lansana Gberie of Sierra Leone, acknowledged that following consultations with members in various configurations last week, questions were raised about the legal nature of the text, and whether it would be called a decision or a waiver, as well as under what legal provision of the WTO law it would be based upon, the trade official said.

He apparently said that those involved in developing the text agreed that it contained "clarifications and waivers" referring to paragraph 3 of the text and did not feel that any choice on the title of the document had to be made at this stage.

Rather, he claimed it was felt that the content, that would ultimately be agreed upon, would determine the legal form and title. He noted that the issue of eligibility as indicated in footnote 1 of the text, came up during his consultations.

The Chair praised China for its proactive and constructive statement at the General Council meeting last week, as it opened the door to a fresh approach to this issue.

As reported in SUNS #9572 dated 10 May, China said that it will opt out from using the draft text provided that the condition stated for the eligibility criterion is removed.

Ambassador Gberie urged members not to spend much time discussing the language of footnote 1, which contains two brackets: "[For the purpose of this Decision, all developing country Members are eligible Members. Developing country Members with capacity to export vaccines are encouraged to opt out from this Decision.] [For the purpose of this Decision, developing country Members who exported more than 10 percent of world exports of COVID-19 vaccine doses in 2021 are not eligible Members.]"

The Chair said that until members indicate how they approach other issues in the draft TRIPS COVID-19 text, the discussions on the issue of footnote 1 should be deferred.

Ambassador Gberie suggested that absolutely none of the clarifications and waivers that are contemplated in the text require any member to change their national law.

He appears to have asserted that a misunderstanding like this can be very unhelpful in moving forward, hoping that members will help him dispel that myth, the trade official said.

However, the TRIPS Council Chair did not indicate any legal evidence, nor the basis for making such a statement, whether it is the Secretariat or any legal authority, said a TRIPS negotiator, who asked not to be quoted.

It would have been helpful to members if the Chair provided the legal basis for statements like this, the negotiator said.

The US said that "we continue to have robust consultations with our Congress and stakeholders on this text, and we look forward to continuing to engage with all members to look for areas of convergence that can lead to a consensus solution," according to the trade official, who preferred not to be quoted.

The European Union, which has already notified its approval of the draft TRIPS COVID-19 text, pitched for an early convergence of the elements listed in the text, saying that it has been a difficult and protracted process.

The EU claimed the process ultimately resulted in a compromise outcome that offers the most promising path towards achieving a meaningful outcome among all WTO members.

The EU touted the important role it played in the discussions and addressed the identified bottlenecks that stand in the way of achieving the common goal of ensuring equitable access.

However, the EU said that the outcome on TRIPS COVID-19 must include other elements needed for a broader package of key outcomes for MC12, including broader aspects of trade and health, joint action against food security concerns and agriculture sustainability, the conclusion of the fisheries subsidies negotiations and WTO reform.

South Africa urged members to engage constructively and to work with speed to ensure that a workable solution can be delivered. It noted that the solution needs to cover the production of COVID-19 products including diagnostics and therapeutics in different locations of the world, especially in Africa, which heavily relies on imports.

It maintained that the text is not perfect, adding that it "falls short of what we are proposing but we hope that members will make targeted textual contributions in the text-based negotiation so as to conclude our negotiations before MC12."

South Africa emphasized that it must work together in the spirit of solidarity to deliver a meaningful outcome that delivers in the interest of developing countries who continue to be disproportionately affected by the pandemic.

India said that it is important now that the outcome of this proposal is immediately doable, practical, and one that ensures security of supplies and equitable and affordable access. India said it hopes that going forward in these text-based negotiations, members will engage in good faith to achieve an effective outcome.

China reiterated what it had already said at the General Council meeting last week with regard to its serious concerns on using the criteria of export share to define eligible members.

China said the language included in the second bracketed text of footnote 1 ("[For the purpose of this Decision, developing country Members who exported more than 10 percent of world exports of COVID-19 vaccine doses in 2021, are not eligible Members]") departs from the original intention of the waiver proposal and would send the wrong signal to stakeholders both inside and outside the WTO.

The Chinese delegate said the second bracket is replete with systemic implications.

China said, leading to systemic implications for future negotiations, it will opt out of the decision only after the eligibility criterion is removed once and for all. China said while some members frequently use the term "red lines", for us the red line is truly a red line.

Several other countries such as Tanzania, which represented the African Group, Nigeria, Indonesia, Sierra Leone, Pakistan, Argentina, Brazil, and New Zealand apparently said, in varying nuanced statements, that they are looking forward to the text-based negotiations, the trade official said.

QUESTIONS GALORE

Switzerland, which had opposed the revised TRIPS waiver proposal co-sponsored by 65 developing and least- developed countries last year, raised several questions on the draft outcome document circulated by the DG on 3 May.

At the outset, the Swiss delegate stated that the draft outcome document contains a number of ambiguities and points where clarification is needed.

While indicating that Bern is ready to work constructively with members, Switzerland said that the Quad outcome is the result of nearly five months of a long process in which the four Quad delegations negotiated among themselves.

Switzerland said that only by receiving detailed and coherent responses and clarifications from all four Quad delegations can the other members who were not part of this process understand what is proposed to them, the Swiss delegate said.

For the sake of transparency and legal certainty, Switzerland requested that members' questions on the Quad outcome and the answers of the Quad delegations must be compiled in written form.

Switzerland posed questions such as on (1) the legal form and the nature of the text; (2) on what provisions of the WTO agreement would this text be based; and (3) what precisely are the clarifications and waivers mentioned in the circulated text.

It sought to know more information to understand better the meaning and background of the brackets contained in the text.

The Swiss delegate also stressed what it defined as the key question: what is supposed to be the practical use of the approach contained in the Quad outcome text, considering that TRIPS and intellectual property rights (IPRs) have not been a barrier to access to COVID-19 vaccines.

Switzerland, which hosts Big Pharma companies like Roche, Novartis, and several other companies, apparently said there is a surplus of COVID-19 vaccines now globally, including in Africa.

According to the Swiss delegate, the problem is no longer the availability of vaccines, but one of vaccination; the question is what would be the practical impact of this Quad outcome in mastering this challenge, namely bringing the jabs to the arms of the people.

The Swiss delegate also wanted to make it clear that when Switzerland says it is prepared to engage with the Quad outcome text without prejudice to its position, that position is: We have not been presented with any evidence that IP or TRIPS would have acted as a barrier to access to COVID-19 vaccines in this pandemic.

On the contrary, Switzerland maintained that TRIPS and IP have played a key role in incentivizing the research, development and manufacturing of new and effective COVID-19 vaccines.

Switzerland also reiterated that it cannot accept an outcome on IP and TRIPS only because a meaningful outcome on trade and health is also needed and the WTO needs to ensure a holistic approach. It called for an appropriate response that is meaningful, comprehensive and balanced, in particular to address export restrictions that affect access and transfer of relevant health technologies.

The WTO, said the Swiss delegate, needs to promote trade facilitating practices and increased transparency of measures taken by members during a pandemic.

The United Kingdom expressed its willingness to join with all members in a text-based process that is open and transparent but said it will not engage in a negotiation that only looks at specific parts of the text.

The whole text must be open for negotiation and the only acceptable outcome is a process that looks at the whole text first, focusing on policy and legal intent, the UK said.

The UK also said unambiguously that it will not jump to and privilege parts of this text. This text is a whole document and it needs to be considered as such, the UK stressed.

The UK delegate noted that the timeline proposed to advance negotiations is ambitious and that time pressures must not be used as justification for rushing any agreement given the need for substantial discussion of the text.

It argued that members are entitled to hear the views of others, ask questions and importantly, receive answers. The inclusivity of views will be essential. Flexibility on a deadline will be needed if answers are not provided.

The UK made it explicit again that no aspects of the text have consensus and that un-bracketed text requires just as much scrutiny as that which is bracketed.

It called for article-by-article discussions, suggesting that only by discussing the whole text can the TRIPS Council understand where areas of convergence or lack thereof exist. For the UK, it is very important to reflect that the proposed text is not final and that the outside world is aware of that.

NEXT STEPS

The Chair of the TRIPS Council asked members to make a big effort this week to work through most, if not all, open issues on Tuesday, continuing all day on Wednesday, if necessary.

As regards collecting and sequencing the open issues, members agreed to address the following issues:

* Footnote 1 and the bracketed language on eligibility of members;

* Paragraph 3(a) - on the use of a single authorization and patent listing;

* Paragraph 6 - on duration, review and possible extension of the instrument; and

* Paragraph 8 - on the scope of the decision with respect to therapeutics and diagnostics.

The Chair clarified that though more questions can be asked, the focus at this juncture should be based on the above issues. However, he did not answer the questions raised by Switzerland and the UK, in what appears to be a chair-led negotiating process where the focus is on issues he listed above.

He urged members that they must place their textual proposals suggesting language in other parts of the outcome text - i.e. outside the brackets - provided they are written proposals, without any further delay. He said members can submit their questions either directly through the Secretariat, or through the regional group coordinator.

As regards the title of the document, and of other procedural questions related to the final shape of the outcome, the Chair said they should be addressed after the content of the text is fully stabilized. Members will meet again at the TRIPS Council in informal mode on Thursday morning to report on the state of play - and hopefully share some significant progress.

In his concluding remarks, the Chair said everybody knows the text is not perfect, emphasising that compromise on all sides is in the DNA of multilateral outcomes.

In order to arrive at the outcome, the Chair said members must adopt the attitude of "What do I absolutely need to have reflected in this text so that my delegation can live with this outcome?" The current situation, according to the Chair, is not conducive to lengthy discussions about what would be "nice to have". He wants delegations to focus on the essentials if members want to get an outcome out of this draft.

As regards the text-based negotiations, he made it clear again that nothing is agreed yet, and that the entire text will have to be adopted by consensus at the end.

From the statements of the DG and the TRIPS Council Chair, it appears that both seem determined to ram through and give a short shrift to an agreement, regardless of multiple questions about the integrity of the text and whether or not there is a positive impact for public health.